KalVista Pharmaceuticals(KALV) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Presents KalVista's unaudited condensed consolidated financial statements, highlighting increased net loss and cash used in operations due to R&D Condensed Consolidated Balance Sheets | Metric | Jan 31, 2022 (in thousands) | Apr 30, 2021 (in thousands) | Change | |:---|:---|:---|:---| | Total Assets | $225,052 | $272,013 | $(46,961) | | Cash and cash equivalents | $45,577 | $50,592 | $(5,015) | | Marketable securities | $149,212 | $198,337 | $(49,125) | | Total Liabilities | $17,116 | $14,820 | $2,296 | | Total Stockholders' Equity | $207,936 | $257,193 | $(49,257) | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands) | 3 Months Ended Jan 31, 2022 | 3 Months Ended Jan 31, 2021 | Change (YoY) | 9 Months Ended Jan 31, 2022 | 9 Months Ended Jan 31, 2021 | Change (YoY) | |:---|:---|:---|:---|:---|:---|:---|\n| Revenue | $— | $— | $— | $— | $— | $— | | Research and development | $19,738 | $9,097 | $10,641 | $50,954 | $29,409 | $21,545 | | General and administrative | $6,945 | $3,560 | $3,385 | $18,848 | $10,472 | $8,376 | | Total operating expenses | $26,683 | $12,657 | $14,026 | $69,802 | $39,881 | $29,921 | | Operating loss | $(26,683) | $(12,657) | $(14,026) | $(69,802) | $(39,881) | $(29,921) | | Total other income | $4,216 | $2,609 | $1,607 | $11,576 | $8,593 | $2,983 | | Net loss | $(22,467) | $(10,048) | $(12,419) | $(58,226) | $(31,288) | $(26,938) | | Net loss per share (basic & diluted) | $(0.92) | $(0.56) | $(0.36) | $(2.38) | $(1.75) | $(0.63) | Condensed Consolidated Statements of Changes in Stockholders' Equity | Metric (in thousands) | Balance at May 1, 2021 | Balance at Jan 31, 2022 | Change | |:---|:---|:---|:---|\n| Common Stock Amount | $24 | $24 | $0 | | Additional Paid-in Capital | $426,437 | $436,313 | $9,876 | | Accumulated Deficit | $(167,836) | $(226,062) | $(58,226) | | Accumulated Other Comprehensive Loss | $(1,432) | $(2,339) | $(907) | | Total Stockholders' Equity | $257,193 | $207,936 | $(49,257) | - Issuance of common stock from equity incentive plans contributed to additional paid-in capital[17] Condensed Consolidated Statements of Cash Flows | Metric (in thousands) | 9 Months Ended Jan 31, 2022 | 9 Months Ended Jan 31, 2021 | Change | |:---|:---|:---|:---|\n| Net cash used in operating activities | $(51,345) | $(19,126) | $(32,219) | | Net cash provided by investing activities | $45,426 | $18,829 | $26,597 | | Net cash provided by financing activities | $1,443 | $1,809 | $(366) | | Net (decrease) increase in cash and cash equivalents | $(5,015) | $1,938 | $(6,953) | | Cash and cash equivalents at end of period | $45,577 | $17,727 | $27,850 | Notes to the Condensed Consolidated Financial Statements 1. The Company - KalVista is a clinical-stage pharmaceutical company developing small molecule protease inhibitors for Hereditary Angioedema (HAE) and Diabetic Macular Edema (DME)[23] - KVD900 is in Phase 3 KONFIDENT clinical trial as a potential oral, on-demand therapy for HAE attacks[24] - KVD824 is in Phase 2 KOMPLETE clinical trial as a potential oral prophylactic treatment for HAE[24] - The company has not generated product sales revenue and had an accumulated deficit of $226.1 million as of January 31, 2022[28] - The COVID-19 pandemic has caused and may cause future delays in clinical trials, potentially impacting financial performance and requiring earlier capital raises[26] - The company anticipates sufficient funding to operate for at least the next twelve months based on current operating plans and existing capital resources[29] 2. Summary of Significant Accounting Policies - The company manages its operations as a single operating segment[33] - Basic and diluted net loss per share are identical because potential dilutive common share equivalents are anti-dilutive during periods of net loss[37] | Asset Type | Level 1 (Jan 31, 2022, in thousands) | Level 2 (Jan 31, 2022, in thousands) | Total (Jan 31, 2022, in thousands) | Level 1 (Apr 30, 2021, in thousands) | Level 2 (Apr 30, 2021, in thousands) | Total (Apr 30, 2021, in thousands) | |:---|:---|:---|:---|:---|:---|:---|\n| Cash equivalents | $12,094 | $— | $12,094 | $2,985 | $— | $2,985 | | Corporate debt securities | $— | $115,041 | $115,041 | $— | $157,873 | $157,873 | | U.S. government agency securities | $— | $34,171 | $34,171 | $— | $40,464 | $40,464 | | Total | $12,094 | $149,212 | $161,306 | $2,985 | $198,337 | $201,322 | 3. Marketable Securities - All debt securities are classified as available-for-sale, with unrealized gains and losses recognized in accumulated comprehensive loss[41] | Type | Amortized Cost (Jan 31, 2022, in thousands) | Fair Value (Jan 31, 2022, in thousands) | Amortized Cost (Apr 30, 2021, in thousands) | Fair Value (Apr 30, 2021, in thousands) | |:---|:---|:---|:---|:---|\n| Corporate debt securities | $115,644 | $115,041 | $158,063 | $157,873 | | Obligations of the U.S. Government and its agencies | $34,245 | $34,171 | $40,473 | $40,464 | | Total | $149,889 | $149,212 | $198,536 | $198,337 | | Maturity | Amount (in thousands) | |:---|:---|\n| One year or less | $109,859 | | After one year through two years | $23,931 | | After two years through five years | $15,422 | | Total | $149,212 | 4. Accrued Expenses | Category | Jan 31, 2022 (in thousands) | Apr 30, 2021 (in thousands) | |:---|:---|:---|\n| Compensation expense | $3,252 | $3,507 | | Research expense | $2,415 | $2,476 | | Professional fees | $596 | $557 | | Other expenses | $187 | $390 | | Total | $6,450 | $6,930 | 5. Commitments and Contingencies - Contractual obligations for preclinical studies and clinical trials total $35.7 million as of January 31, 2022, with cancellation provisions[46] - No contingent liabilities required accrual as of January 31, 2022[49] 6. Leases - Total rent expense for the nine months ended January 31, 2022, was approximately $1,289,000, compared to $606,000 for the same period in 2021[52] | Years ending April 30, | Operating Leases (in thousands) | |:---|:---|\n| 2022 | $435 | | 2023 | $1,631 | | 2024 | $1,511 | | 2025 | $1,547 | | 2026 | $1,585 | | Thereafter | $4,721 | | Total minimum lease payments | $11,430 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses KalVista's financial condition, operational results, and clinical program progress, highlighting increased expenses and liquidity Management Overview - KalVista is developing oral plasma kallikrein inhibitors for HAE, with KVD900 for on-demand treatment and KVD824 for prophylactic treatment[56] - KVD900 is the most advanced potential oral therapy for acute HAE attacks, having met its primary endpoint in Phase 2 and now in Phase 3 KONFIDENT trial, with data anticipated in the second half of 2023[58][59][61][64] - KVD824 is in the Phase 2 KOMPLETE clinical trial for prophylactic HAE treatment, with data anticipated in mid-2023[65][66] - A novel oral Factor XIIa inhibitor program is in the research stage, with an IND filing anticipated in 2023, targeting HAE and other indications[67][69] - 93% of HAE patients surveyed expressed willingness to switch to oral therapy for both on-demand and prophylactic use, emphasizing the need for comparable efficacy and safety[57] - The COVID-19 pandemic continues to impact operations and clinical trials, potentially causing delays and affecting financial performance[71] Financial Overview - No product sales revenue has been generated to date, and none is expected until regulatory approval and commercialization of product candidates[72] - Research and development expenses are expected to continue to increase as product candidates advance through clinical development, particularly for later-stage trials[75] - General and administrative expenses are anticipated to increase due to expanding operating activities, patent portfolio maintenance, and public company compliance costs[78] - Other income includes interest income and research and development tax credits from the UK government[79] Results of Operations Key Components of Results of Operations (in thousands) - Three Months Ended January 31 | Metric | 2022 | 2021 | Increase (decrease) | |:---|:---|:---|:---|\n| Research and development expenses | $19,738 | $9,097 | $10,641 | | General and administrative expenses | $6,945 | $3,560 | $3,385 | | Interest, exchange rate gain and other income | $4,216 | $2,609 | $1,607 | Research and Development Expenses by Program (in thousands) - Three Months Ended January 31 | Program/Category | 2022 | 2021 | |:---|:---|:---|\n| KVD900 | $7,265 | $2,736 | | KVD824 | $3,798 | $1,925 | | Personnel | $5,250 | $2,764 | | Preclinical activities | $3,375 | $1,594 | Key Components of Results of Operations (in thousands) - Nine Months Ended January 31 | Metric | 2022 | 2021 | Increase (decrease) | |:---|:---|:---|:---|\n| Research and development expenses | $50,954 | $29,409 | $21,545 | | General and administrative expenses | $18,848 | $10,472 | $8,376 | | Interest, exchange rate gain and other income | $11,576 | $8,593 | $2,983 | Research and Development Expenses by Program (in thousands) - Nine Months Ended January 31 | Program/Category | 2022 | 2021 | |:---|:---|:---|\n| KVD900 | $16,556 | $9,944 | | KVD824 | $10,277 | $6,594 | | Personnel | $14,454 | $8,013 | | Preclinical activities | $9,544 | $4,636 | Liquidity and Capital Resources - Working capital, primarily cash and marketable securities, is anticipated to fund operations for at least the next twelve months[98] Summary of Net Cash Flow Activity (in thousands) - Nine Months Ended January 31 | Metric | 2022 | 2021 | Change | |:---|:---|:---|:---|\n| Net cash used in operating activities | $(51,345) | $(19,126) | $(32,219) | | Net cash provided by investing activities | $45,426 | $18,829 | $26,597 | | Net cash provided by financing activities | $1,443 | $1,809 | $(366) | | Net (decrease) increase in cash and cash equivalents | $(5,015) | $1,938 | $(6,953) | - Future funding may involve equity or debt financings, collaborations, strategic partnerships, or licensing arrangements, which could dilute existing stockholders or require relinquishing valuable rights[105] Critical Accounting Policies and Significant Judgments and Estimates - Financial statements require management estimates and assumptions, which are evaluated on an ongoing basis, and actual results may differ[108][109] Recently Issued Accounting Pronouncements - No recently issued accounting pronouncements are applicable[110] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, KalVista Pharmaceuticals, Inc. is exempt from providing quantitative and qualitative market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[111] Item 4. Controls and Procedures Details the evaluation of disclosure controls and procedures, confirming effectiveness and reporting no material changes in internal controls Evaluation of Disclosure Controls and Procedures - Disclosure controls and procedures were evaluated and deemed effective as of January 31, 2022[112] Changes in Internal Controls over Financial Reporting - No material changes in internal control over financial reporting occurred during the quarter ended January 31, 2022[113] - The company is monitoring and assessing the COVID-19 pandemic's impact on internal controls[113] PART II. OTHER INFORMATION Item 1. Legal Proceedings KalVista Pharmaceuticals, Inc. is not currently involved in any material legal proceedings or claims that would adversely affect its operations - No material legal proceedings or claims are currently known to the company[116] Item 1A. Risk Factors Updated risk factors highlight potential adverse consequences from unstable global market conditions, including the COVID-19 pandemic and Ukraine conflict - Updated risk factors reflect adverse consequences from unstable global market and economic conditions, including the COVID-19 pandemic and the conflict in Ukraine[117] - Global disruptions could reduce access to capital, delay or abandon development plans, and affect clinical trial sites in Eastern European countries[117] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable to KalVista Pharmaceuticals, Inc. for the current reporting period - Not applicable[119] Item 3. Defaults Upon Senior Securities This item is not applicable to KalVista Pharmaceuticals, Inc. for the current reporting period - Not applicable[120] Item 4. Mine Safety Disclosures This item is not applicable to KalVista Pharmaceuticals, Inc. for the current reporting period - Not applicable[121] Item 5. Other Information This item is not applicable to KalVista Pharmaceuticals, Inc. for the current reporting period - Not applicable[122] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including executive certifications and Inline XBRL documents - Includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1)[123] - Contains Inline XBRL documents for financial data (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[123] Signatures The report is officially signed by KalVista Pharmaceuticals, Inc.'s Chief Executive Officer and Chief Financial Officer on March 10, 2022 - Report signed by T. Andrew Crockett (CEO) and Benjamin L. Palleiko (CFO) on March 10, 2022[128]